Statute Details
- Title: Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 15) Regulations 2004
- Act Code: SFA2001-S225-2004
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting power: Section 337(1) of the Securities and Futures Act
- Commencement: 26 April 2004
- Legislative status: Current version as at 27 March 2026 (per provided extract)
- Key provisions: Section 2 (Definitions); Section 3 (Exemption)
- Regulatory focus: Exemption from market conduct provisions for “stabilising action” in relation to specified convertible notes
What Is This Legislation About?
The Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 15) Regulations 2004 (“Stabilising Action Exemption Regulations”) is a targeted set of regulations made under the Securities and Futures Act (“SFA”). In plain terms, it creates a limited legal “carve-out” that allows certain market participants to take stabilising steps in connection with specific convertible notes without triggering particular market conduct prohibitions under the SFA.
Stabilising action is a common feature of securities offerings, particularly where issuers or their financial intermediaries seek to reduce short-term volatility after issuance. However, stabilisation can also resemble prohibited market manipulation if not carefully bounded. This legislation therefore does not give a general permission to stabilise; instead, it defines stabilising action narrowly and exempts it only for specified instruments, specified actors, and only within a strict time window.
Practically, the Regulations are designed to facilitate the orderly trading of two particular series of convertible notes issued by Tata Motors Limited—namely the “2009 Notes” and the “2011 Notes”—by permitting stabilisation activity in Singapore or elsewhere, while preserving the general market conduct framework of the SFA.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides the short title and states that the Regulations come into operation on 26 April 2004. For practitioners, this matters for determining whether stabilising activities undertaken around the issuance period fall within the legal regime.
2. Definitions (Regulation 2)
Regulation 2 is central because the exemption turns entirely on whether the activity falls within the defined terms. The Regulations define:
- “2009 Notes”: the 5-year convertible notes due April 2009 issued by Tata Motors Limited for up to US$150 million, convertible into either (a) fully paid equity shares of Tata Motors Limited (par value of 10 Indian Rupees each) or (b) global depositary shares, where each share represents one fully paid equity share.
- “2011 Notes”: the 7-year convertible notes due April 2011 issued by Tata Motors Limited for up to US$350 million, convertible into either (a) fully paid equity shares (par value 10 Indian Rupees each) or (b) global depositary shares representing one fully paid equity share.
- “stabilising action”: an action taken in Singapore or elsewhere by Morgan Stanley & Co. International Ltd (or any of its related corporations) to buy, or to offer or agree to buy any of the 2009 Notes or 2011 Notes, respectively, to stabilise or maintain the market price of those notes in Singapore or elsewhere.
Two points are particularly important for legal analysis. First, the exemption is instrument-specific: only the defined Tata Motors convertible notes qualify. Second, the exemption is actor-specific: only Morgan Stanley & Co. International Ltd and its related corporations may conduct the stabilising action as defined. This reduces the risk that other intermediaries attempt to rely on the exemption.
3. The exemption from sections 197 and 198 of the SFA (Regulation 3)
Regulation 3 is the operative provision. It provides that, subject to paragraph (2), sections 197 and 198 of the SFA shall not apply to stabilising action carried out in respect of the 2009 Notes or 2011 Notes with either of the following counterparties:
- a person referred to in section 274 of the SFA; or
- a sophisticated investor as defined in section 275(2) of the SFA.
While the extract does not reproduce sections 197, 198, 274, or 275, the structure indicates that sections 197 and 198 are market conduct prohibitions that would otherwise apply to dealings in securities. The exemption therefore operates as a targeted relief from those prohibitions when the stabilising action is conducted with the specified categories of persons.
4. Time limitation: 30 calendar days from issuance (Regulation 3(2))
Regulation 3(2) imposes a strict temporal boundary: the exemption does not apply to stabilising action carried out at any time after the expiry of the period of 30 calendar days from the date of issuance of the relevant notes (i.e., 2009 Notes or 2011 Notes, as the case may be).
This is a key compliance point. Even where the actor and instrument match the definitions, stabilisation beyond the 30-day window would fall outside the exemption and could expose the participant to liability under the SFA provisions that the exemption otherwise disapplies.
5. Formal making and signature
The Regulations were made on 22 April 2004 by the Monetary Authority of Singapore (MAS), with the signature of Koh Yong Guan, Managing Director. For practitioners, this confirms the regulatory authority and the formal date of enactment, which may be relevant when assessing whether stabilising conduct was planned or commenced before the Regulations were made.
How Is This Legislation Structured?
The Regulations are concise and consist of an enacting formula and three substantive provisions:
- Regulation 1 (Citation and commencement): sets the short title and commencement date.
- Regulation 2 (Definitions): defines the specific notes (2009 Notes and 2011 Notes) and the term “stabilising action,” including the permitted actor and the nature of the stabilising conduct.
- Regulation 3 (Exemption): disapplies specified SFA sections for stabilising action, subject to counterparty categories and a 30-day post-issuance limit.
Notably, the Regulations do not create additional procedural requirements in the extract (such as reporting, record-keeping, or disclosure obligations). Instead, the legal effect is achieved through the disapplication of SFA provisions, constrained by definitions and conditions.
Who Does This Legislation Apply To?
The exemption is designed to benefit a narrow set of market participants. In substance, it applies to stabilising action carried out by Morgan Stanley & Co. International Ltd or its related corporations (as defined within the meaning of “stabilising action”). The stabilising activity must relate to the specific 2009 Notes or 2011 Notes issued by Tata Motors Limited.
Even where the actor and instrument match, the exemption is further limited by the counterparty requirement in Regulation 3(1). Stabilising action must be carried out with either (a) a person referred to in section 274 of the SFA or (b) a sophisticated investor under section 275(2). Finally, the exemption is time-bound: it cannot be relied upon after 30 calendar days from issuance.
Why Is This Legislation Important?
For practitioners, the significance of these Regulations lies in how they balance two competing regulatory goals: enabling legitimate stabilisation practices while preventing conduct that could be characterised as market manipulation. By disapplying sections 197 and 198 of the SFA for defined stabilising action, the Regulations provide legal certainty to intermediaries involved in the issuance process.
At the same time, the Regulations are deliberately restrictive. The exemption is not a blanket permission. It is limited to particular notes, a particular stabilising actor (Morgan Stanley and related corporations), specified counterparty categories, and a short post-issuance period. This means that compliance teams must treat the exemption as a checklist exercise: if any element fails—wrong instrument, wrong actor, wrong counterparty category, or stabilisation beyond 30 days—the exemption may not apply.
In practical terms, this affects how trading desks and legal teams structure stabilisation programmes. They must ensure that stabilising purchases (or offers/agreements to buy) are documented and executed within the defined parameters, and that the timing of any stabilising trades is monitored against the 30-day limit. It also affects how counterparties are selected and classified, given the reliance on the SFA’s definitions for section 274 persons and sophisticated investors.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular, sections 197, 198, 274, 275(2), and the regulation-making power in section 337(1).
- Futures Act (as referenced in the provided metadata timeline context)
- Stabilising Act (as referenced in the provided metadata timeline context)
- Timeline / Legislation timeline (for version control and amendment history)
Source Documents
This article provides an overview of the Securities and Futures (Market Conduct) (Exemption for Stabilising Action in respect of Dealings in Notes) (No. 15) Regulations 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.